NC Tax Questions for Same-Sex Marriages

Posted on: February 6th, 2014

Same-sex marriages are not legal in North Carolina, however same-sex couples who reside in North Carolina and were legally married in a jurisdiction that recognizes these marriages may have questions about North Carolina taxes.

After last year’s groundbreaking ruling in the United States vs. Windsor case, the IRS now recognizes married same-sex couples for all tax purposes, regardless if they reside in a state that does not grant same-sex marriages. The federal case has resulted in changes across the nation on the state level, including North Carolina, affecting employers of individuals in a same-sex marriage, retirement plans, income taxes, and more.

With the many changes and new requirements, same-sex couples in North Carolina who were married in another jurisdiction are trying to navigate tax laws. The North Carolina Department of Revenue has created a Frequently Asked Questions section specifically for married same-sex couples. Read the full list of questions and answers at the previous link.

Can couples file as ‘married filing jointly’ or ‘married filing separately’ on their North Carolina income tax return?

Do withholding exemptions change?

For same-sex couples married with children:

Are adopting parents eligible for the adoption credit for qualified adoption expenses? Are both parents?

Which spouse can claim a North Carolina tax credit?

Which parent can claim the child as dependent?

Couples should meet with a North Carolina tax attorney to ensure appropriate forms are filed. Last Fall the Department of Revenue released a tax directive for same-sex spouses, part of which explains couples will be required to include a copy of their federal return with their NC income tax return, and must file a separate NC income tax return on Form D-400 “using the filing status of single or, if qualified, head of household or qualifying widow(er) and must complete a separate pro forma federal return for North Carolina purposes.” Annual tax reviews are important, and this year it is especially critical for married LGBT couples.